Parent Student Loans

Before Borrowing Parent Student Loans

Perhaps the best thing you can do as a college parent is to help oversee the financial aid process. You want to make sure your child’s college bill is paid (in a timely manner) so they can concentrate on school. Before you borrow parent college loans, make sure you have taken all of the appropriate financial aid steps:

Parent Student Loans vs. Other Financial Options

Parent loans? Retirement funds? Savings? There are many ways to help your child pay for college. Depending on the cost of the school your child is attending, you may be able to cover college costs without borrowing any parent college loans. But for most families, cash and savings reserves cannot cover an entire college education. That’s when you need to understand and explore your financial options, including parent college loans.

Option

Advantages

Disadvantages

Good Idea?

Savings

Cheaper than borrowing money

A great way to pay for college if you were able to save money and raise kids!

Yes!

Credit Cards or cash advance

Easiest

Most expensive choice you can make

Interest charges typically compounded monthly.

Your growing balance can become extremely difficult to pay off and can damage your credit

Credit check required, although more lenient than typical consumer loans

4% origination fee set by the U.S. government

Student must be under the age of 24, unmarried, an undergraduate and financially dependent

Yes!

Co-sign a private student loan

Easy, fast, convenient

Loan in your child’s name, not yours

Can borrow up to the full cost of your child’s attendance

Interest rates are predominantly variable based on credit

Fewer repayment options than federal student loans.

Yes!

As you can see from the chart above, there are many options for you to help your child pay for college, from savings to parent student loans. Only you can decide which option is best for you.

What are parent student loans?

As a parent, you have several loan choices to help your child pay for school. The most common type of parent student loans are Direct PLUS Loans (see chart above). Direct PLUS Loans are made in your name, not the student’s, and you are fully responsible for making sure the loan gets paid back. There may also be lenders who offer private parent student loans in your name, if you want to try to compare rates to the Direct PLUS Loan.

If you don’t want to have parent student loans in your name, you might research becoming a co-signer on your child’s private student loan. Private student loans are made in the student’s name, but you are also a responsible party on the loan as a co-signer. Learn more about becoming a co-signer.

Ready for a private student loan?

If you need to borrow money for your child’s college, and you don’t want the loan in your name, private student loans can be a great option. Private loans can cover up to the total cost of attendance for your child, which may include tuition, books, room and board, travel, a computer and more. You’ll want to read our section on Becoming a Co-signer to better understand your responsibilities in the private student loan process.

Need Help?

College Loan Corporation has helped over 800,000 families find student and parent college loans!